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Non-Tech : Binary Hodgepodge -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (4761)	1/6/2011 5:07:06 PM
From: Glenn Petersen	1 Recommendation Read Replies (27) \| Respond to of 6763

Facebook Opens Door for Financial Disclosure or IPO in 2012 By ANUPREETA DAS, GEOFFREY A. FOWLER and JEAN EAGLESHAM Wall Street Journal JANUARY 6, 2011, 4:47 P.M. ET. Facebook Inc. said it intends to breach a critical 500-shareholder limit this year, meaning it will be forced to begin disclosing financial information or stage an initial public offering by April 2012, according to a new 100-page private-placement memo being distributed to potential investors in the company. The popular social-networking company said in the document that it intends to breach a critical 500-shareholder limit this year. Crossing the limit triggers a Securities and Exchange Commission rule that requires that companies file financial information—even if their shares don't trade publicly. Facebook's intentions have been under heavy debate since the company launched a private share offering through Goldman Sachs Group Inc. this week. Some investors have wondered whether the arrangement with Goldman was designed to avoid such disclosures. The document makes clear that isn't the case, and that Facebook will likely be a publicly traded company in 2012. A Facebook spokesman declined to comment. Goldman Sachs declined to comment. Companies have 120 days after crossing this year-end 500-shareholder threshold to register as a reporting company. Companies can go over the 500 limit during their financial year and avoid the reporting requirements, provided that on the date of their fiscal year-end they have 499 or fewer shareholders. "It happens all the time. It is a common process for smaller Silicon Valley companies to find themselves with say 510 shareholders and buy back 11 of them before the year-end," said John Coffee, a law professor at Columbia University. Coming under the 500-shareholder reporting requirement doesn't force companies to go public, though most firms conclude they might as well reap the benefits of being public if they are being required to make similar financial disclosures. "A number of companies, including Google and Apple, became reporting companies well ahead of doing an IPO," Mr. Coffee said. Write to Anupreeta Das at anupreeta.das@wsj.com and Geoffrey A. Fowler at geoffrey.fowler@wsj.com online.wsj.com